CBS 11 Investigates: Unusual Reason Insurance Claims Denied

West Fertilizer Co., which exploded last month, killing 14 people, injuring more than 200 others and causing tens of millions of dollars in damage to the surrounding area had only $1 million in liability coverage, lawyers said Saturday.

(credit: CBSDFW.COM)

DALLAS (CBSDFW.COM) – Jessica Cummings says on her way into work one morning last May, she was shaken up. “I was shocked. I was so scared. I was crying.”

A driver rear-ended her on I-30 in downtown Dallas. “He hit me so hard where this flew off and I couldn’t open my trunk.”

But nothing could have prepared her for her next big shock: The other driver’s insurance company denied the claim.

Cummings says their excuse was unbelievable…

The insurance company claimed it couldn’t find the other driver — it’s own client.

Cummings says, “All they kept saying was I can’t get a hold of them, I don’t know what to tell you.”

Cummings says she had no choice but to file a claim with her own insurance company and pay the $500 deductible herself. “And just because you can’t get a hold of someone doesn’t mean anything. That’s why they pay you – you’re an insurance company.”

Victor Smith is in the same situation. He says last May, a driver smashed into his brand new Honda Accord. “I’m angry. I’m out of my money, and I want something done.”

But he got the same excuse from the same insurance company: United Automobile Insurance. “These guys told us ‘hey, we can’t get in contact with him, so we’re not able to compensate you on your claim, even though he’s insured with us.’”

While United Auto Insurance says it couldn’t find its client, Smith knows exactly where to find him. The guy who caused the accident lives in an apartment over in the next breezeway — in the same building. “How hard can it be to find him? It’s pretty straightforward. He’s next door.”

The Texas Department of Insurance says the number of complaints is accelerating. “We are seeing more complaints of people who say my claim is denied because the insurance company says it can’t get a hold of their insured” says agency spokesman Jerry Hagins.

So CBS 11 went to the company’s office in Richardson seeking answers.

A Vice-President, John Haenel told us, “We’re definitely following the policy guidelines.”

The company says it denies a claim because it can’t find its client less than one percent of the time. “We follow the Texas standard policy and everything is regulated by the Department of Insurance, so everything is correct” said Haenel.

Victor Smith and Jessica Cummings are just two of the 70 people who’ve filed complaints with the Better Business Bureau.

Smith said, “They didn’t want to pay, and they were looking for anyway not to.”

CBS 11 wanted to find out exactly why the company denied Jessica Cummings’ claim, but didn’t get an answer that day.

The next day, Cummings says the company called her, and told her she’d be getting a refund.

Why?

The company said it finally found the other driver.

Jessica Cummings sees it differently. “They know they’re guilty, and they didn’t get away with it.”

Victor Smith isn’t so lucky. He hasn’t heard anything about getting a refund.

In Texas, United Automobile Insurance writes policies for a company called Old American County Mutual Fire Insurance. The state is investigating them.

No one from Old American County Mutual called us back. No word on whether the state is also looking at United Automobile Insurance.

So how can you avoid the same kind of a problem?

The Texas Department of Insurance says if you’re in an accident, call the police and get a police report.

That’s so you have independent proof that you were really in an accident.